NEW YORK (Reuters) -Walmart Inc is warning major packaged goods makers that it can no longer stomach their price hikes, pitching its own private-label products to shoppers as less-expensive alternatives to suppliers' name-brand goods.
For the world's biggest retailer, which reports earnings Feb. 21, any increase in prices --- even by just a few cents -- can have negative effects, prompting some shoppers to look for bargains at dollar stores or warehouse chains such Costco.
Walmart, which touts its "Everyday Low Price" policy, raised prices last year on milk, frozen meals and Tide detergent, to name a few, as its suppliers battled soaring costs of everything from chemicals to wheat and fuel.
Walmart previously has stopped ordering products over disputes on pricing.
In 2018, Walmart pulled back on ordering Campbell Soup Co's products during the key winter season over a dispute over prices and shelf space promotion.
Source: https://finance.yahoo.com/news/walmart-pushes-back-major-product-140939470.html
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Companies use inflation to hike prices and generate huge profits, report says
Some of the nation's largest retailers have been using soaring inflation rates as an excuse to raise prices and rake in billions of dollars in additional profit, a corporate watchdog group charged on Friday.
Companies such as CVS Health, Kroger and T.J. Maxx parent company TJX appear to have raised their prices unnecessarily in 2020 and 2021 at a time when Americans were dealing with the economic fallout from the coronavirus pandemic, Accountable.US said in a new report. Instead of keeping prices stable for struggling families, corporations have overcharged Americans and prioritized profit, the group claims.
Accountable.US said it examined the financial statements of the nation's top 10 retailers over the past two years — including Lowe's and Target — and found that they collectively increased their profits by $24.6 million for a grand total of $99 billion.
The new figures comes as companies enjoy their most profitable year since the 1950s. Pre-tax profits last year soared 25% from 2020, far outpacing the increase in consumer prices. The report highlights an ongoing debate about the causes of inflation, with some consumer advocates arguing that corporations are using inflation as a justification for passing on even higher price hikes to consumers.
Companies have used some of that profit to boost CEO compensation and give lofty benefits to shareholders like increased dividends or stock buybacks, the report charges. Indeed, many corporate leaders have boasted to investors of their ability to pass along price increases to consumers.
Source: https://www.cbsnews.com/news/retail-price-gouging-lowes-amazon-target-accountable-us/
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The piece delves into corporate profits, revealing record highs despite claims of supply chain issues and rising costs. The author presents arguments from both sides, with some accusing corporations of raising prices for increased profits and others citing rising raw material costs. The article suggests that corporate consolidation may contribute to higher prices by reducing competition.
However, the article introduces a twist by presenting the perspective that corporate greed might be a red herring. Economist Justin Wolfers argues that companies always seek to maximize profits, but competition keeps prices in check. The article suggests that a key change contributing to inflation may be the lag in wages compared to rising prices. While wages have increased about 5% this year, prices have risen by 7.7%.
Wolfers speculates that workers may be negotiating for non-monetary benefits like remote work flexibility rather than higher wages. The article concludes by proposing that consumers might play a role in the inflation mystery, as demand continues despite rising prices. It suggests that when consumer buying slows down, companies will lower prices to stimulate demand, easing inflation.